Where there’s oil there’s a way: Can US sanctions halt Russian crude exports to India?

Energy News Beat

[[{“value”:”

New Delhi’s role as a counterweight to China solidifies its status as Washington’s’ key partner in South Asia, outweighing short-term concerns over Russian oil revenues

Where there’s oil there’s a way: Can US sanctions halt Russian crude exports to India?Where there’s oil there’s a way: Can US sanctions halt Russian crude exports to India?

The year 2025 had barely started when the outgoing Joe Biden administration presented a belated ‘holiday gift’ to Russian oil exporters. Washington announced a new sanctions package – the “most significant” yet, according to US officials.

This time, it affected Russian oil giants Gazprom Neft and Surgutneftegaz. These companies already face restrictions on access to American financing and technology, but now it seems that the US and UK are about to impose more severe sanctions on the Russian oil giants. 

The sanctions target 183 vessels – primarily the so-called “shadow fleet” tankers that transport Russian oil – as well as support vessels. According to US estimates, these vessels carry about one-third of Russia’s oil exports, and this move is intended to suffocate Russian oil producers. While this will likely trigger a surge in oil prices, US and EU authorities believe they can hold out until prices stabilize and decline.

India, one of the key purchasers of Russian oil, swiftly responded to the announcement. A senior Indian official, speaking on condition of anonymity, told Bloomberg that state-owned refineries will no longer process oil brought in by sanctioned tankers. They are negotiating with alternative suppliers from the Middle East and considering other strategies to avoid secondary US sanctions.

This situation is certainly concerning, but how critical is it?

Indian politicians often use Bloomberg as a means of conveying their intentions to overseas partners. Right after the price cap on Russian oil was implemented, Bloomberg quoted another high-ranking Indian official who claimed that although India wouldn’t officially join the “price cap,” it would unofficially adhere to the restrictions. 

The current sanctions package demonstrated that there wasn’t much truth behind those words: tankers from the “shadow fleet” were sanctioned precisely because they transported oil purchased in violation of the price cap. It appears that India is sending a similar message this time, attempting to reassure the US – at least until US President Donald Trump’s new administration clarifies its stance on sanctions and in general on relations with Russia. 

New Delhi and Moscow have plenty of ways to navigate around sanctions. The very concept of a “shadow fleet” allows for significant flexibility when it comes to flags, ownership of vessels, and operators (and sometimes even the use of AIS transponders). Moreover, India has a number of private oil refineries, and there are serious doubts about whether the US will actually impose sanctions on both government-owned Indian companies and the oil tycoons closely aligned with the ruling Bharatiya Janata Party and Indian Prime Minister Narendra Modi. 

The main concern isn’t even the potential spike in oil prices for European consumers – the stability of European economies isn’t exactly a top concern for the US. In the eyes of the Washington elites, India remains the most valuable partner in South Asia, as its mere existence complicates China’s economic and political expansion. Therefore, the Americans are unlikely to risk their relationship with New Delhi just to temporarily reduce Moscow’s oil revenue.


READ MORE:
Why Russia is here to stay, making India’s military stronger

The real question is how long India is willing to keep circumventing these sanctions. After the outbreak of the Ukraine conflict, New Delhi faced intense pressure from the US and EU, which urged it to align with other Western democracies, condemn Russia, and cut off all cooperation with it.

At that time, Indian diplomats managed to deftly navigate these pressures – largely because neither the Americans nor the Europeans were ready to sever ties with such an important partner – and waited for tempers in the West to cool down and politicians to realize that India’s neutral stance, along with that of some other countries, helps the global economy function as a unified system, even if it comes with certain challenges. This position allowed India to secure a steady supply of inexpensive petroleum products and a modest flow of technology and investments from Russia.

However, recently, New Delhi has increasingly signaled its willingness to act as a peacemaker. Under these circumstances, India’s stance on sanctions may eventually change. 

This article was first published by the magazine Profile and was translated and edited by the RT team 

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

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‘Future of Europe’ hangs on German snap elections – Musk

Energy News Beat

The entrepreneur has reaffirmed his support for the right-wing Alternative for Germany party ahead of the February vote

‘Future of Europe’ hangs on German snap elections – Musk‘Future of Europe’ hangs on German snap elections – Musk

The SpaceX and Tesla CEO Elon Musk expressed his “full support” for the right-wing Alternative for Germany (AfD) at a campaign rally held by the party in the city of Halle on Saturday. The US-based billionaire called on party backers to “go all out” to convince Germans to vote for AfD, arguing that the upcoming snap parliamentary elections could be key for the future not only of Germany but of the world.

The tech entrepreneur addressed the crowd that gathered for the event in Halle via video link. The party chose the central German city for its opening election campaign rally, which was attended by party co-leaders Tino Chrupalla and Alice Weidel, who is also the AfD candidate for chancellor. Some 4,500 people joined the event, according to AP.

“This election is extremely important. I do not say it lightly when I think the future of civilization could hang on this election,” Musk told the cheering crowd. “I think it could decide the entire fate of Europe, maybe the fate of the world.”

The businessman has said he was convinced that people in Germany wanted “something different” from what they have had over the past decade. Voting for the AfD was the only way to bring about this much-desired change, he stated, calling on party supporters to do everything possible to convince their “friends and family” to join them, one person at a time.

Musk also praised the policies proposed by the AfD as the “common sense” ones and compared them to the approach advocated by US President Donald Trump. The businessman emerged as Trump’s close advisor during the latter’s election campaign last year. “You have my full support,” he told the rally, adding that the AfD seeks to get “government out of people’s ways” and give “people back personal freedom” and protect them from “dangers.”

The right-wing party has long been known for its harsh anti-immigrant rhetoric, with many German media outlets referring to it as far-right. Until recently, all other major German political parties refused to cooperate with AfD. Friedrich Merz, the leader of the Conservative Christian Democratic Union (CDU), however, recently said that he would be willing to accept AfD support for his own party’s immigration policy proposals, even if it would be the only other political group to back them.

Musk has been active in his support for AfD over the past months. In December, he called it the only party capable of “saving Germany” and praised its anti-immigration stance while calling German Chancellor Olaf Scholz an “incompetent fool.”

Earlier in January, the businessman also hosted a livestream with Weidel on his social media platform X, reiterating that “only AfD can save Germany.” The livestream was closely monitored by some 150 EU officials and technical specialists as Brussels suspected it could give the right-wing party an “unfair advantage” ahead of the February 23 vote.

Musk’s activities have provoked unease in Berlin. Scholz had previously accused the SpaceX and Tesla CEO of seeking attention online and urged people to not “feed the troll.” Later, he also called him a “threat” to democracy and stated that although people in Germany and Europe enjoy freedom of speech, it cannot be used to support “extreme-right positions.”

On Saturday, Musk accused the German government of “suppressing [free] speech very aggressively” and said that “true democracy” is impossible under such circumstances.

 

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DOGE Seeks to Shed Vast Amounts of Government Office Space. Here’s How Much the Government Leases, and Where, and What Leases it Can Shed During Trump’s Term

Energy News BeatPrice

For CRE, the motto in 2024 was “Survive till 2025” via extend-and-pretend. Now it’s 2025, and here comes the government’s office space.

By Wolf Richter for WOLF STREET.

The DOGE people in the Trump administration are considering shedding a big portion of the massive office space that the government owns or leases nationwide, managed by the General Services Administration (GSA), including selling two-thirds of the office space the government owns and terminating three-quarters of the leased office space, according to the WSJ.

Much of this office space is vacant or underused and poorly maintained due to lack of funding, according to GSA testimony before Congress in 2023, cited by the WSJ, which further noted:

“A recent report from Sen. Joni Ernst, a Republican from Iowa who chairs the Senate DOGE caucus, found that not one of the headquarters for any major agency or department in Washington is more than half full. GSA-owned buildings in Washington, D.C., average about a 12% occupancy rate. The government owns more than 7,500 vacant buildings across the country, and more than 2,200 that are partially empty.”

The office sector is already in a depression, with default rates that exceed those during the worst moments of the Financial Crisis. Putting this inventory on the market for sale is going to weigh on the already collapsed prices of older office buildings – prices of 50-70% below the last sale before the pandemic are now common.

And terminating leases is going to stress office buildings, their landlords, and their lenders even more, likely entailing more defaults and foreclosure sales. This is a much needed but very bitter medicine to alleviate government waste.

What office landlords and their lenders are facing.

Here we look at the leased office space, where those buildings are, and what portion of the leased space the GSA has the right to terminate in 2025, and also through 2028 (Trump 2.0), based on an analysis from Trepp, which tracks commercial real estate debt and CMBS.

  • GSA leases 149 million square feet (msf) of office space around the US.
  • GSA pays $5.2 billion in annual rent to private-sector landlords.
  • Through 2028, GSA has the right to terminate 53.1 msf of leases, or 35.5% of its leased space, spread over 2,532 properties.
  • In 2025, GSA has termination rights on 21.2 msf spread over more than 1,000 properties,
  • If GSA terminates all possible leases during Trump 2.0, it would save the government $1.87 billion in annual rent after 2028.
  • In the vast Washington DC metro, GSA leases nearly 10% of the entire office market, 35.8 msf in 446 buildings, and can terminate 9.6 msf of that in 2025.
  • In the Washington D.C. metro, GSA currently pays $1.47 billion in annual rent.
  • GSA leases nearly 6% of the office space in the Kansas City metro (DoD, USPS, Treasury, VA, and USDA), 4.3 msf, of which it can terminate 1.0 msf in 2025.

Here are the top 10 metros in terms of government office space. GSA leases 66.3 msf of office space in them and has termination rights in 2025 on 18.9 msf (28.5%):

Metropolitan area Number of buildings Office space
msf
% of total market Annual Rent, Million $ Space with termination rights in 2025, msf
Washington DC 446 35.8 9.7% $1,470 9.59
New York City 223 5.0 0.7% $249 1.53
Hagerstown-Martinsburg 60 4.8 N/A $210 1.58
Kansas City 78 4.3 5.8% $99 1.03
Philadelphia 124 3.0 2.9% $97 0.71
Atlanta 90 3.0 1.9% $68 1.35
Los Angeles 168 3.0 1.0% $134 1.04
Dallas-Fort Worth 86 2.8 1.4% $82 0.57
Chicago 113 2.4 1.0% $92 0.93
Denver 74 2.3 2.3% $77 0.58
Total 1,462  66.3 $2,576 18.9

Office CRE would be stressed enough without this.

The office sector of commercial real estate is in a depression, and office debt just keeps getting worse: The delinquency rate of office mortgages across the US that have been securitized into commercial mortgage-backed securities (CMBS) spiked to a record 11% at the end of 2024, blowing by the Financial Crisis peak, having exploded over the past 24 months from an everything-is-just-fine 1.6% at the end of 2022, to a disastrous 11.0% at the end of 2024.

The motto in 2024 was “survive till 2025” via extend-and-pretend. But now it’s 2025, and here comes the government’s vacant office space.

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The post DOGE Seeks to Shed Vast Amounts of Government Office Space. Here’s How Much the Government Leases, and Where, and What Leases it Can Shed During Trump’s Term appeared first on Energy News Beat.

 

2020 election victory was stolen from Trump — Putin

Energy News Beatelection

The Russian leader believes the Ukraine conflict might have been avoided if Donald Trump had become US president in 2020

2020 election victory was stolen from Trump — Putin2020 election victory was stolen from Trump — Putin

Russian president Vladimir Putin has said the 2020 US presidential election was “stolen” from Donald Trump, and that had the Republican won, the Ukraine conflict might have been avoided. 

“I cannot disagree with him that if he had been president, if his victory hadn’t been stolen in 2020, perhaps the crisis in Ukraine that arose in 2022 wouldn’t have happened,” Putin has said in an interview published by Russia 1 TV journalist Pavel Zarubin on Telegram on Friday.

In 2023 Trump claimed to American radio host Hugh Hewitt that the Ukraine conflict would never have begun if the 2020 US elections hadn’t been “rigged” and Joe Biden hadn’t replaced him in there Oval Office. 

“[Putin] would have never done it if the election weren’t rigged, our election. It was rigged and stolen. If that election wasn’t rigged, if I were president, you would right now have millions of people living that are dead,” according to an interview transcript.

Trump has never admitted that he lost the 2020 election, despite courts failing to find evidence of widespread voter fraud. He eventually stepped down as president after a crowd of his supporters stormed the US Capitol building on January 6, 2021, interrupting the certification of Biden’s victory.

The Democrats accused Trump of inciting the riot and impeached him in 2021. Trump has denied any wrongdoing, dismissing the accusations as a “witch hunt.”

He has consistently alleged the 2020 election was blighted by irregularities, and that he lost despite winning 10 million more votes than Biden.

Hours after he was sworn in for his second term Trump pardoned around 1,500 people involved in the storming of the Capitol building. He described the defendants as patriots and hostages, insisting that their prosecution was politically motivated.

 

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EU state’s PM links massive cyberattack to ‘foreign’ forces

Energy News Beat

The incident looks like a “textbook example” of a scheme used to punish dissenting governments in the West, Slovakia’s Robert Fico has claimed

EU state’s PM links massive cyberattack to ‘foreign’ forcesEU state’s PM links massive cyberattack to ‘foreign’ forces

A massive cyberattack targeting Slovakia’s state General Health Insurance Company (VSZP) was orchestrated by foreign forces that were also active in Ukraine during the 2014 Maidan coup, Slovak Prime Minister Robert Foco has claimed.

Speaking at a joint news conference with the country’s Health Minister Kamil Sasko on Friday, Fico claimed the operation sought to paralyze the nation’s healthcare system.

The attack involved a “huge number of attempts to obtain sensitive information from the VSZP,” including patients’ personal data, the prime minister said. If successful, it could disrupt the operation of the healthcare system on a nationwide scale, he warned. Administration of drugs to cancer and cardiology patients could be affected, according to Slovak media reports.

Sasko stated that the VSZP was able to withstand the attack, which began on Friday afternoon, adding that both the insurance firm and the National Health Information Centre (NCZI) were “in crisis mode” and being closely monitored by the authorities.

Fico branded the incident a “textbook example” of a scheme used to punish a “disobedient government that has a different view on some things.” The prime minister has long been a staunch critic of the EU’s approach to the Ukraine conflict.

Fico has also refused to provide arms to Kiev and called for the conflict with Russia to be resolved through negotiations instead.

The prime minister has also called for dialogue with Russia and pledged to attend the 80th anniversary WWII Victory Day celebrations in Moscow this year, expressing his commitment to honoring the sacrifices of the Red Army and the Soviet people in defeating Axis powers.

Most recently, Fico clashed with Ukrainian leader Vladimir Zelensky over Kiev’s refusal to extend a natural gas transit agreement with Russia after it expired late last year.

Fico linked the Friday attack to a similar incident targeting the national information system of the Geodesy, Cartography and Cadaster Office, which faced a significant cyberattack last week. A few days after the incident, the nation’s interior ministry suggested that it could have been orchestrated from Ukraine, a Slovak ‘Pravda’ news media outlet reported.

The group involved in both attacks was also active in Georgia and in Ukraine, particularly during the 2014 Maidan coup, the prime minister claimed.

Earlier this week, Fico warned about a group of operatives supposedly plotting a coup in Slovakia. Citing a confidential report compiled by the Slovak Information Service (SIS) intelligence agency, Fico said that the group was “strictly monitored.” The country’s opposition has dismissed the report as a compilation of “conspiracy theories.”

 

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Bank Of England Urges Labour: Cut ‘Burdensome’ Net Zero Mandates To Grow Economy

Energy News Beat

The Bank of England said government climate requirements issued by the UK govt. are hindering efforts to boost economic growth.

keir starmer wind
The Bank of England should be freed from burdensome net zero rules to help grow the economy, Rachel Reeves has been told. [emphasis, links added]

Sam Woods, the head of the Bank’s Prudential Regulation Authority (PRA), said the thicket of climate requirements imposed by Westminster was impeding efforts to boost growth.

In a letter to the Chancellor and Sir Keir Starmer, Mr. Woods said the requirement for the Bank to “have regard” for dozens of different “climate and the environment” issues made it harder to encourage risk-taking in the City and take a more light-touch approach to regulation.

Mr. Woods raised the issue in response to a call from Ms. Reeves for ideas on how to improve Britain’s flatlining growth rate.

The Bank of England’s main instructions from the Government are to keep inflation at 2pc and maintain a stable financial system.

However, the Government can also advise the central bank to “have regard” for other issues when making decisions. This means the issues covered by the notices have to be factored into decision-making.

Net zero requirements

The PRA, which sits within the Bank and is responsible for making sure individual lenders and financial institutions are operating soundly and safely, has more than two dozen of its own individual “have regard” instructions.

Mr. Woods wrote to ministers:

The number of principles that the PRA is required to ‘have regard’ to has substantially increased in recent years, increasing the complexity of the analysis required when making or amending regulation. Depending on how they are counted, the PRA currently has around 25 such ‘have regards’.

“There is scope to rationalize some of these ‘have regards’ where they form a cluster, for instance in the set of ‘have regards’ which relate to climate and the environment.”

For example, the Prudential Regulation Committee, which effectively governs the PRA and on which Mr. Woods serves, must “have regard to … leading the world in sustainable finance, including by unlocking the full potential of the financial services sector to fund the green transition.”

Slashing back net zero requirements could help speed up the process of regulating companies and potentially make it cheaper to be certified. …snip…

Requirements to focus on climate change ramped up under the Conservatives in the era of Governor Mark Carney before being cut back under Jeremy Hunt, the last Tory chancellor.

They have since been reprioritized under Labour.

Read rest at Yahoo Finance

 

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Trump’s Repeal Of EV Mandate Shakes Auto Industry’s Electric-Only Future

Energy News Beat

Automakers are facing setbacks in reaching EV goals as consumer interest wanes and Trump ends the Biden-era EV subsidies and mandate.

trump rally
Automakers have been backtracking on their EV goals over the past year as consumer interest failed to keep up with the vision automakers had.

That vision appears to have been born from the idea that if the federal government mandated people to drive electric cars, then people would buy them. [emphasis, links added]

Not only did consumers rebel against this EV future, but they also voted for a candidate who had vowed throughout his campaign to end the Biden-Harris administration’s EV mandate.

On Monday, President Donald Trump made good on the promise, signing the “Unleashing American Energy” executive order. Among other things, it eliminates the EV mandate to “promote true consumer choice.”

Now, the automakers who were already losing billions on EVs could be in more trouble, depending on how much EV sales were buoyed by the mandates the automakers were counting on.

“I think the EV mistake has basically crippled the U.S. automotive industry, and unless there are bailouts, I can’t see these guys surviving,” Jack Lifton, executive chairman of the Critical Minerals Institutetold Just the News.

Scaling back

Trump’s order revokes a non-binding goal Biden had set in 2021 to make half of all new cars sold to be electric by 2030.

To block the EPA’s tailpipe emissions standards, which by some estimates would require 66% of all new cars sold in the U.S. to be electric by 2032,

Trump would have to work with the EPA to rewrite its rules. Either that or Congress could legislate the rule away.

While most consumers still want gas-powered cars, EV adoption rates continued to climb last year.

According to Cox Automotive’s Kelley Blue Book, EV sales jumped 15.2% year over year in the last quarter of 2024, and full-year EV sales reached 1.3 million, an increase of 7.3% in 2023.

Automakers, however, had expected sales volumes to be much higher, and when they weren’t keeping pace, they began realigning their EV targets with what consumers appear to want.

Ford had planned to invest 40% of its capital budget in electric vehicle lines, but in August, that was brought down to 30%. The company also scrapped plans for a three-row electric SUV.

General Motors had planned to sell only zero-emission vehicles by 2035. Last July, the company said it was pushing back the opening of an EV manufacturing plant in Michigan to mid-2026, and pausing plans for an electric line in its Buick brand.

Stellantis also scaled back its EV targets last fall and temporarily suspended production of an EV Fiat 500 due to sluggish demand.

Meanwhile, the automakers have also been losing billions on their EV bet.

Ford, which separates its EV business from other parts of the company, lost $3.7 billion in the first three quarters of 2024. General Motors expects to narrow its losses on EVs this year by $2 billion to $4 billion.

All-electric Rivian lost $75,563 on every EV it sold in the third quarter, rivaling the $58,391 that Ford lost for each EV it sold, according to energy expert Robert Bryce.

Despite these losses, Bryce reports, the Department of Energy Loans Program Office gave the carmaker a $6.57 billion loan guarantee.

All electric Tesla saw its net income rise in the third quarter of 2024 to nearly $2.17 billion, or 62 cents a share, up from $1.85 billion, or 53 cents a share, a year ago.

However, Politico reports that the automaker earned $10.7 billion over 10 years selling credits from government climate programs designed to encourage automakers to switch to EVs.

This funding stream accounted for 33% of the company’s profits. If Congress repeals the program, that could impact Tesla’s profits considerably.

Read rest at Just The News

 

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Trump squeezing Denmark over Greenland – FT

Energy News Beat

The Danish PM had a “horrendous” conversation with the US president about acquiring the island, officials have told the paper

Trump squeezing Denmark over Greenland – FTTrump squeezing Denmark over Greenland – FT

US President Donald Trump is serious about taking over Greenland and aggressively pushed the idea in a tense phone call with Danish Prime Minister Mette Frederiksen, Financial Times reported on Friday, citing sources.

The US leader held a 45-minute conversation with Frederiksen last week prior to his inauguration, unnamed European officials told the paper, acknowledging that it “had gone very badly.”

They described Trump’s tone during the call as confrontational and “very firm” after Frederiksen reportedly reiterated Denmark’s stance that the island is not for sale, but that it is open to discussing expanded military cooperation.

“It was horrendous,” an FT source said, with another calling the conversation “a cold shower,” adding that “before, it was hard to take it seriously. But I do think it is serious, and potentially very dangerous.”

One official told FT that the Danish side was left “utterly freaked out” by the exchange, which reportedly included threats of targeted tariffs against Denmark. According to the report, European officials had previously assumed Trump’s statements about acquiring Greenland were merely a negotiating tactic to assert more influence in the Arctic and check Russia and China, but the call with Frederiksen had dashed those hopes.

Greenland is home to about 60,000 people and a US military base. It is an autonomous region within Denmark that has been self-governing since 1979. The territory is of high strategic importance to NATO due to its crucial location in the Arctic, which allows for control of nearby shipping lanes.

Trump floated the idea of buying Greenland in 2019 during his first term, but the initiative went nowhere, with both Denmark and the island’s government rejecting it. However, he has since revived the idea, citing Greenland’s importance for US national security.

Greenlandic Prime Minister Mute Egede has said that while the island is open to cooperation with Washington, “we don’t want to be Americans. We don’t want to be a part of the US.”

 

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Week Recap: U.S. Shale Steady, Trump’s $500B AI Plan, Tight Gas Markets

Energy News Beat

Weekly Daily Standup Top Stories

U.S. Shale’s Capital Discipline Outweighs Trump’s Pro-Growth Rhetoric

US shale producers are focused on capital discipline and shareholder returns, limiting the impact of Trump’s pro-oil policies. Increased Permian rig activity is unlikely to significantly boost oil production due to inventory depletion and efficiency […]

China and India Scramble for Crude as Sanctioned Russian Tankers Turn Back

By Julian Lee, Serene Cheong and Alex Longley (Bloomberg) — The most aggressive Western sanctions imposed on Russia’s oil sector since Moscow’s 2022 invasion of Ukraine threaten to disrupt global supply as buyers — led by China […]

UK Nuclear Power Ambitions Hampered by Delays and Soaring Costs

The construction of Hinkley Point C and Sizewell C nuclear power plants is facing significant delays and cost overruns, jeopardizing the UK’s energy security. Sellafield Ltd’s cybersecurity failings have raised concerns about the safety and […]

EU makes admission about Russian gas

A spokesperson has acknowledged that the sanctioned country’s energy is still flowing into the bloc Russian energy continues to flow to the EU despite the bloc’s commitment to eliminating its dependence on it, a European […]

Trump lifts pause on non-FTA LNG export approvals

Trump issued the executive order, which was widely expected, just hours after officially taking over his second four-year term as the president. The move is part of a series of new energy actions as part […]

Trump unveils $500 billion AI ‘Stargate’ project

The initiative will ensure US dominance and create 100,000 jobs, the president claimed US President Donald Trump has announced the launch of Stargate, a new initiative set to invest up to $500 billion in artificial […]

Highlights of the Podcast

00:00 – Intro

01.03 – U.S. Shale’s Capital Discipline Outweighs Trump’s Pro-Growth Rhetoric

04:45 – China and India Scramble for Crude as Sanctioned Russian Tankers Turn Back

07:27 – UK Nuclear Power Ambitions Hampered by Delays and Soaring Costs

05:87 – EU makes admission about Russian gas

10:46 – IEA says global gas markets set to remain tight in 2025

13:30 -Trump lifts pause on non-FTA LNG export approvals

15:25 – Trump unveils $500 billion AI ‘Stargate’ project

19:27 – Outro


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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter


Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into a special Saturday, January 25th, 2025, edition of the Daily Energy News. Beat Stand up. It man, it was a long, great week. We had a lot of stories. Trump taking office, all what’s going on with, you know, with him. You know, we’ve got, you know, all of the different actions that he’s taking. Will things remain to be seen? Oil prices were up. So it’s been absolutely busy week. I held down two solo shows, so I apologize in advance for that. But I’m going to go ahead. We got the team coming up, some of our best segments from the week. So I’m going to go ahead and turn it over that quickly, though, guys. As always, energy news beat. Hit the description below. Sign up for the substack. Invest in oil.energy newsbeat.com if you want to get access to better oil deals. But other than that guys, we’re going to let you get out of here. Start your week. Thank you for making us part of your weekend and we will be back in the chair Monday morning. [00:01:02][51.9]

Stuart Turley: [00:01:03] Let’s start with drill, baby, drill, drill. And fiscally responsible. Excuse me. I mean, when US shale capital discipline outweighs Trump’s pro growth rhetoric, it’s an interesting article, and this actually comes from Rystad Energy. Our folks over there rystad, there are three main bullet points. My goal and then there’s some details in here, U.S. shale producers are focused on capital discipline. Really what this is, we’ve been saying this for quite a while and shareholder returns increase. Permian rig activity is unlikely due to significantly boost production due to inventory depletion and efficiency concerns. I believe this great man has been talking about that. I believe his name is Michael Tenner. Yes. Thank you, sir. And then the U.S. is already on track to meet a Besson’s 333 hydrocarbon production target without policy changes driven by Engels and Gas. I’ll tell you how the growth could come in at the expense of the capital spending more than 11 billion. While Permian reinvestment rates are also expected to edge higher during 9%. Point is pretty interesting for I love the folks over there Rystad. They normally have some good stuff. [00:02:16][73.5]

Michael Tanner: [00:02:17] No, they have great stuff. I love this this look because again, I think it piggybacks off of what we’ve been saying here on the podcast. Stu That yeah, I think drill, baby, drill. Wow. That’s great rhetoric. And I think, you know, corporate executives, as this article talks about, are going to be encouraged by this. It’s not necessarily going to all of a sudden know, well, we got to pick up three rigs now nobody’s sitting there like that. You know, they specifically mentioned shale 4.0, which, you know, really is a combination of of the learnings from 3.0, what went on in shale 3.0, increase production at all costs, show production growth, show inventory, not really what’s going on now. It’s all capital discipline, it’s all consolidation. It’s how do we squeeze the most amount of profit out of what theoretically is a declining inventory count, not necessarily declining? Well, count not a play on words there, but a diminishing, you know, economic inventory at these prices. So it’s going to be really interesting. I mean, this article does point out that, you know, Trump’s Treasury secretary, Scott Besser, has floated an increase of 3 million barrels of oil equivalent per day as part of his broader 333 economic plan. You know, again, whether that’s BOE or barrels of oil, who knows? As always, you know, there is a BOE. It’s a sleight of hand. If someone’s thrown BOE at you, you should ask, well, how? Give me the break down. What’s your gas versus oil? Because you’re sometimes using, you know, it’s a 6 to 1 ratio to convert gas to oil equivalent, but it’s about a 20 to 1 economic conversion. And so if someone’s giving you BOE and they’re doing it in 6 to 1, it’s look over here, not over here, because it can be a sleight of hand. So it’ll be interesting to see what he says underneath. But again, I think what this does is specifically underscoring and, you know, things that we’ve been talking about in terms of it’s a Trump is not going to be able to just wave a wand and increase production because it wasn’t like there was production being held back in the previous administration. For all the power, all the knocks that Joe Biden gets, one of them can’t be all he’s holding down. Oil production actually increased under his administration, whether he likes it or not. [00:04:29][132.0]

Stuart Turley: [00:04:29] Well, the the malarkey that they did under the Treasury and we’ll talk about her and her haircut. I mean, we’ll talk about her here in a second. And but the stuff that they just put out will cost a lot of people, a lot of money and all this stuff. China and India scramble for crude is sanctioned Russian tankers turn back. This one is very interesting. Here’s a quote out of the article. It is even likelier there will be a sustained market disruption. Fishman added. We could see a meaningful drop in Russian exports. I think that it’s going to be ended fairly soon. So I don’t think this disruption in fact, I think. We’re actually going to see sanctions being released on Moscow. Because when you take a look at China and India, listen to this have bought 81% of Russian seaborne crude exports since the invasion of Ukraine. Now, Michael, here’s where it gets funny. India and China’s refinery capacity has grown substantially. The U.S. has shrunk. So guess who’s selling Russian refined products? India and China. Guess who they’re selling them to? The U.S. and the EU. This is a gigantic can of worms. [00:05:47][77.9]

Michael Tanner: [00:05:47] It really is. Talk about the Dark fleet. This is going to get super crazy. I think a lot of this is what you’re seeing reflected in kind of the current weekly bump in prices. You know, I mean, we saw early in the week prices were above $80. We’re now kind of sit in that 77, 78 range. But you’re talking about 600 or 161 tankers are involved in about basically 2000 shipments have been sanctioned since this the old invasion. But now it’s it’s continuing to match Indian. You know, India and China are going to get and are already seeing effects of this being turned away. You know, it’s about 1.4 million barrels of crude oil per day, according to an estimate from the some London based E.A. Gibson Ship Brokers Limited. This equates about half of Russian seaboard crude exports, which is pretty unbelievable. The Maguire Group estimates that this is going to be even greater at 2.15 million barrels per day of global exports, which obviously is could drive up prices. So this is a big old hairy mess. I don’t know what’s going to happen here. What’s the read on the the the Trump admin stance on this? They’re going to keep these sanctions in place. What are they going to do? [00:06:58][70.7]

Stuart Turley: [00:06:59] I think it’s going to be dependent on the negotiations on ending the war. It is so important for President Trump to end the Ukraine war immediately. And I think that sanctions are going to ease everybody saying, sanctions are going to stay in place for a long time. And the Democrats are quite honestly putting some landmines out there. They are despicable players in this whole process. But I believe that Trump is going to meet with Putin sooner than later. So I think it’s going to be great. UK is in trouble. Nuclear power Ambitions Hampered by delays and soaring costs. The construction of Hinkley Point C in size will see nuclear power plant is facing significant delays and cost overruns, jeopardizing the UK’s energy security. This is not just the only thing doing the UK energy security. It’s called all of their med green energy policies. They’re not doing all forms of energy. They are absolutely horrific in their energy policies. They’re following the German model. The UK government and EDF currently plan to fund 40% of Sizewell C, which is expected to power as many as 6 million homes once operational again. The problem is they let this go too long and they need the baseload trying to put the renewable energy in there and now they don’t have the natural gas coming out of it. And then you have natural gas shortages in other areas. So energy security needs to be thought out more like the Saudi Arabia Arabia folks, when you take a look at energy policies over a ten, 20 year plan, you cannot do what the United States has been live, just live through four years of bad energy policies and then trying to do it. Don’t do what the U.S. and the UK you’re doing. [00:08:56][117.5]

Stuart Turley: [00:08:57] The EU makes admission about Russian gas spokesperson is acknowledge the sanctioned country energy is still flowing into the block. Russian energy continues to flow to the EU. Particularly glass is still present in the EU. The EEC spokesperson for Climate Action and Energy and US. Anna Kizer. I’m sorry, I’m going to butcher your name, it, Pocan told a briefing on Monday. She noted the commission plans to issue a road map in late February or mid-March aimed at completely ending Russian energy imports. Here’s where it is absolutely going to be a little tricky. Germany Chancellor Schulze has lost the vote of confidence and now they’re having a runoff or another election in Germany. And so what you’re going to see is his opponent now is calling for Russia to keep Russian natural gas. So Germany has totally been industrial advised because they cannot get enough natural gas. I just had an interview with Steve Reese, who is, in my opinion, one of the foremost knowledgeable men in the United. States about natural gas, the auditing, and he has talked to Harold Hamm. This this podcast is going to come out and it’s absolutely phenomenal. He’s also talked to Toby Rice about things. They’ve got a cradle to grave solution where they are going to be supplying LNG to the German markets. And and so that he is but is still a lot more costly in order to get it there. But it is secure and he did make that point home big with me. So you’ve got to have energy security if you’re going to have businesses and industrialization. [00:10:44][107.1]

Michael Tanner: [00:10:46] IEA says global gas market set to remain tight in 2025. I mean, this is super interesting. This is specifically focused on natural gas, which, again, you know, if you’re concerned about what’s going on in oil, it looks like supply might quite outpace demand. What they’re saying on the oil side is the demand may not be there. But with this focus specifically on natural gas, the IEA does these kind of quarterly gas market updates. Their quote was that the markets have, quote, moved towards a gradual rebalancing last year after the supply shock that followed the Russia full scale invasion of Ukraine in February 2022. Again, pointing out that this report is talking about global natural gas markets, not necessarily the U.S. gas markets, which do remain slightly overbalance from the standpoint we get a lot of natural gas sitting on the sideline being flared. We’re talking specifically about the global gas balance. So basically, the IEA is talking about that. You know, they the reason why they’re saying it’s tightened a little bit AK that the supply is now getting back in balance with demand is mainly due to Asia. You know, in terms of again, from the demand side, Asia’s, you know, their demand, their global gas demand rose by about 2.8 percentage points or about 150,000,000,000m³. I mean, 2024, which was above the 2% growth rate that they saw somewhere between 2010 and 2020. We also saw below average growth in liquid LNG output, which really kept supply tight. And there was a bunch of kind of wild weather events that happened. You know, this report is basically saying that the similar dynamics are expected to persist in 2025 as this new export capacity gets going. A lot of that’s coming from the U.S., which we’ll cover in the next segment. But also Qatar is coming online both over the course of next year and the second half of the decade. They also note that geopolitical tensions have kind of continued to kind of push volatility in gas markets there, though, the halt of the Russian piped gas transit via Ukraine on January 1st, 2025, does not pose an immediate security risk for the European Union. It could increase European LNG import requirements and further tighten global market fundamentals in 2025. We know what’s going on with Moldova and all that stuff. The quote from the IEA, Director of energy Markets and Security. I’m going to butcher this name Kosuke Summer Dorie quote Gas market fundamentals have improved over the past year, but for now we are still seeing significant tightness due to rising demand and muted growth in LNG capacity. Heightened geopolitical uncertainty adds to the risk. He goes on to say While international cooperation on gas supply security has expanded since the region energy crisis began, greater efforts are needed from responsible producers and consumers who should strengthen their collective efforts to reinforce architecture for safe and secure global gas supplies. So, you know, global gas markets are going to continue to stay tight. [00:13:29][163.1]

Michael Tanner: [00:13:30] First, a full day in office. Trump lifts pause on not FDA LNG export Approvals. This was an executive order which was widely expected to basically get our LNG export terminals going, specifically according to the order of the Energy Secretary. Great friend of the show, Chris Wray, is directed to restart reviews of applications for approvals of LNG projects, quote, expeditiously as possible, consistent with applicable law. The order goes on to say, quote, In assessing the public interest to be advanced in any particular application, the Secretary of Energy shall consider the economic and employment impacts to the United States an impact of security of to its allies and partners that would result from granting the application. They’re also going to look at the Alaskan LNG potential, which which includes all the permitting and infrastructure to get pipelines and all that done. You know, and this why this bleeds into what the IEA is talking about is the US has an ability to help wean Europe off its Russia supply, which means the security risk that everybody scared about Russia. You can get off Russian gas and bring yourself more energy security If the United States would get its act together and we would start building these things. And that’s exactly what Trump and Chris Right. Are going to be doing. It’s great that we have them in office. We remember that in January of 2024, the Biden administration paused pending decision on exports of LNG to non-OECD countries until the deal. We can update its underlying analysis for authorizations. Basically, they released a report last month, but it didn’t really say anything. There are several projects that will benefit from this. These include Cambridge’s Commonwealth LNG project in Cameron, Louisiana, and Venture Global’s LNG CP2 project in Louisiana. Also the Sabine Pass Stage five expansion by Cheniere Energy and Energy Transfer’s Lake Charles LNG export Patel facility and Sempra. Their Port Arthur LNG export will also benefit lots of great benefits of here in the LNG space. Good for you. [00:15:24][114.0]

Michael Tanner: [00:15:25] Trump unveils a $500 billion A.I. Stargate program. This is, as I said, in the open. On one level, great. On one level, spooky, basically with Larry Ellison, Sam Altman and Marsha Schiro, signed by his side. US President Donald Trump announced the launch of Stargate, which is a new initiative set up. That is, according to reports, going to invest up to $500 billion in artificial intelligence, intelligence infrastructure. You know, basically the three primary caught corporate partners, SoftBank leading the financing side open, A.I. leaning the operational side, and Oracle, which is kind of leading the data center effort, have pledged $100 billion in investment. And with an additional $400 billion set to be attracted over the next four years. The quote from President Trump is that this is a monumental undertaking and a resounding declaration of confidence in American potential under a new president. You know, they already you know, Larry Ellison said in kind of an initial kick out meeting that they already have one of these data centers, these Stargate data centers under construction here in Texas. There will be up to 20 of them, which each spend basically about half 1,000,000ft² are planned to support the huge amount of infrastructure that’s needed across these high computational AI systems. Trump went ahead and said he estimated that these would create 100,000 jobs across the United States. Sam Altman, who’s the CEO of Open Air or Closed? I also named ARM Microsoft and Indivior as key initial technology partners. You know, this was dropped actually back in 2023. The news website Information did report that Microsoft and Open Air were collaborating on a supercomputer known as Stargate, which was estimated to cost about $100 Million. It’s not quite clear, per se whether or not that project is connected to the new Stargate initiative that was announced today. You know, I think one, I think it’s fascinating. And then the part where I think this connects into energy is where one obviously AI in these huge supercomputers need power. And eventually you hook hooking up to a wind farm can hooked up. This is a solar farm. You’re either going to have to pipe in natural gas or start building nuclear facilities. And my guess is because Larry Ellison came out and said that there’s already one of these in construction in the great state of Texas. My guess is that they’re going the natural gas route. So I think that’s that’s you know, what this means for energy is this could become an interesting off grid solution for natural gas companies. And it’ll be interesting to see exactly where this is located, because if you can now all of a sudden, almost like a Bitcoin mine, take your gas off grid and instead of trucking it to a, you know, energy transfer or, you know, who’s going to send it on down to their processing or fractionation facility, you know, you’re now able to take the gas directly out of the pipeline or directly from these oil and get these upstream firms and power your, you know, power your your data center. It could be a very, very interesting shift of the model when it comes to what we would consider on versus off grid power generation. I had a great interview actually with Eric Rice. He’s the president over at Sovereign Capital. And we talked a lot about on grid off grid type generation when it comes to specifically Bitcoin mining, but this type of stuff as well. I mean, you know, if you’re able to, again, take this gas that would otherwise be sold down a pipeline or flared off and use it to power these data centers, you know, you’re going to see this is truly where when companies like OECD talk about the artificial intelligence boom as it comes as it pertains to the natural gas market, this is things they’re talking about specifically. So again, I think it remains to be seen how they’ll power this. But, you know, this is this is a big endeavor. And, you know, $500 billion is nothing to sneeze at it. It’ll be interesting to see. We did see Elon Musk in a in a tweet war with Sam Altman basically say, hey, you don’t even have less than 10% of this $100 billion raised. And and Sam kind of quipped back at him. So again, it’ll be interesting to see how this works. And we know Elon Musk is no fan of open AI or he calls it closed AI. So we will see what happens. [00:15:25][0.0][907.8]

The post Week Recap: U.S. Shale Steady, Trump’s $500B AI Plan, Tight Gas Markets appeared first on Energy News Beat.

 

Sales of Existing Homes Finally Begin to Thaw a Little, amid Highest Supply for December since 2018

Energy News BeatPrice

2024 was the worst year since 1995 for sales because prices are too high after the 50% spike in 2019-2022.

By Wolf Richter for WOLF STREET.

The market for resale homes has started to thaw just a little from its frozen condition as more buyers and sellers started getting used to the 7% mortgage rates, rather than waiting for them to plunge or whatever. And more “locked-in” homeowners are selling their homes to deal with changes in life, thereby giving up their below-4% mortgages. So sales volume ticked up a little over the past few months from the deep-freeze levels before, but remained still very low.

Sales of existing single-family houses, townhouses, condos, and co-ops that closed in December rose to 329,000 homes, not seasonally adjusted, up by 10.8% from December 2023, but still down by 36% from December 2021, testimony to the ongoing but slightly softening demand destruction.

The seasonally adjusted annual rate of sales, which attempts to iron out the seasonal changes and multiplies this out to a 12-month period, rose by 2.4% in December from November to an annual rate of 4.25 million homes – down by 30% from the rate in December 2021 and by 23% from the rate in 2019, according to the National Association of Realtors today (historical data from YCharts):

For the whole year 2024, actual sales fell to 4.06 million homes, the lowest since 1995, below even the worst years during the Housing Bust, when demand destruction was caused by an economic and financial meltdown that followed years of reckless mortgage lending.

But in 2023 and 2024, demand destruction was caused by a historic spike in home prices in the prior three years, when the NAR’s national median price shot up by nearly 50% from June 2019 through June 2022 – which then collided in 2023 with mortgage rates that returned to the normal-ish levels before the money-printing era started in 2009.

Highest supply for any December since 2018.

Supply of unsold existing homes on the market, at 3.3 months (red line in the chart below), was the highest for any December since 2018, and higher than 2017 and 2019-2023.

Active Listings doubled since 2021.

Active listings – total inventory for sale minus homes whose sales are pending – at 871,500 in December (bold red line), were at the highest level for any December since 2019, having nearly doubled since December 2021 amid the plunge in sales.

Unsold inventory, at 1.15 million homes, was up by 16% year-over-year. Over the holiday period in December, demand dries up, homes get pulled off the market, new listings dry up, and what is on the market, sits there longer without selling.

Days on the market lengthen to 70 days.

The median number of days before the home is either sold or pulled off the market because it failed to sell rose to 70 days in November, the most for any December since 2019, and up from 61 days a year ago, according to data from Realtor.com.

Days on the market track the mix of how motivated sellers are by letting their home sit on the market when it doesn’t sell right away, and how quickly homes sell that do sell.

Prices are too high.

Single-family house prices. As has been the case for months, the median price of single-family houses was revised down for the prior month, which also reduced the year-over-year gain for that month. For November, the median price was revised down to $409,200 from $410,900 originally reported a month ago, which shaved the year-over-year gain for November to +4.3%, from the originally reported +4.8%. These downward revisions keep happening. I bring this up because the December year-over-year gain was an outlier of +6.1%, the highest since October 2022, but when the December median price gets revised down next month, the year-over-year gain will be back in the range of other year-over-year gains in 2004.

Based on the pre-pandemic seasonality, the median price drops sharply in January, and January-February mark the seasonal low points.

The 50% price explosion between June 2019 and June 2022, on top of the large price gains in the prior 10 years, was driven by the Fed’s interest-rate repression and money-printing schemes which have created the #1 problem in the housing market today: Prices are way too high.

Condo and co-op prices. Here too, as has been the case for months, the median price of condos and co-ops was revised down for November to $358,200, from the originally reported $359,800. This shaved the year-over-year gain to +2.3%, from the originally reported +2.8%. And so we can expect that the December median price will also stick with tradition and get revised down as well.

As reported today, the median price in December, at $359,000, was up by 4.5% year-over-year, and we expect tradition to continue with a downward revision next month. Unlike single-family house prices, the median condo price didn’t experience year-over-year declines in mid-2023.

But home prices vary widely by metro. 

In a number of the largest cities, prices of single-family houses and condos have been dropping for over two years.

Double-digit price declines of single-family houses from their respective peaks in 2022 or 2021 occurred in four of the biggest cities:

  • Austin: -19%, to lowest price level since 2021
  • Oakland: -17%, to lowest since 2020
  • New Orleans: -17%, to lowest since 2020
  • San Francisco: -15%, to lowest since 2018

Double-digit price declines of condos and co-ops from their respective peaks in 2022 or 2021 occurred in seven of the biggest cities:

  • Austin: -21%, to lowest price level since 2021
  • Oakland: -19%, to lowest since 2016
  • San Francisco: -15%, to lowest since 2015
  • Detroit: -13%, back to 2018
  • New York City: -13%, back to 2017
  • New Orleans: -12%, first seen in 2016
  • Seattle: -10%, back to 2017.

Here are all our charts and data of the big cities with the biggest price declines from their respective peaks years ago. And here are our charts and figures of home prices in the 33 biggest metropolitan areas, from steep declines to ongoing increases, documenting the divergence in the US housing market.

Slowly getting used to the old normal 6-7% mortgages.

The average 30-year fixed mortgage rate has been above 6% since September 2022 and above 7% on and off since October 2022. The daily measure by Mortgage News Daily is today at 7.11%. Freddie Mac’s weekly measure, released yesterday, of the average 30-year fixed mortgage rate was 6.96%.

The real estate industry has now given up waiting for mortgage rates to plunged to wherever and is encouraging sellers and buyers to get used to “a new normal of mortgage rates between 6% and 7%,” as the NAR had put it, which are the old normal rates that prevailed before the money-printing era started in 2009..

The CEO of Fannie Mae, the largest Government Sponsored Enterprise that buys and guarantees mortgages, also encouraged buyers, sellers, and everyone in the industry to get used to these 6% to 7% mortgage rates.

Before the money printing era, the average mortgage rates had been well above 5%. The Fed’s QE and zero-interest-rate policy, which started in 2008 and, with some interruptions, finally ended in 2022, had created an anomaly:

Demand destruction by region.

The charts below show the seasonally adjusted annual rate of sales, released by the NAR today, in the four Census Regions of the US. A map of the four regions is in the comments below the article.

Northeastern US: The seasonally adjusted annual rate of sales rose to 530,000 homes:

Midwestern US: The seasonally adjusted annual rate of sales dipped to 990,000 homes.

Southern US: The seasonally adjusted annual rate of sales rose to 1,930,000 homes.

Western US: The seasonally adjusted annual rate of sales rose 790,000:

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